WILMINGTON, Del. - DaimlerChrysler AG chairman Juergen Schrempp insisted Tuesday that he "never had a secret plan" to take over Chrysler Corp. when the automaker merged with Daimler-Benz in 1998.
"What we defined ... as a merger of equals was precisely complied with and done," Schrempp told a federal court judge.
Schrempp appeared on the sixth day of a trial in which Chrysler shareholder Kirk Kerkorian is suing for more than $1-billion in compensatory damages from DaimlerChrysler. Kerkorian says he was duped into losing an acquisitions fee because Daimler-Benz falsely characterized its takeover as a "merger of equals."
Schrempp is a key witness in the trial, since Kerkorian's argument rests partly on a 2000 Financial Times article in which Schrempp said the deal was billed as a merger of equals "for psychological reasons." Schrempp also described Chrysler as a "division" of Daimler.
Schrempp said Tuesday he was trying to put a positive spin on the merger, since the company was being "hammered by the media" for Chrysler's poor performance that fall.
"I wanted to shift attention away from the continuous talk about the merger, which was done," he said. "The operational problems had nothing to do with the merger."
Schrempp said he referred to Chrysler as a division because he considers all of the merged companies - including Mercedes cars and trucks - to be divisions. He also denied he had a plan to fire American executives and replace them with Germans.
"It would have been against my own interests to try to scheme in removing board members," he said. "My interest was in creating the most successful, innovative auto company."
Schrempp added that he has never spoken with Kerkorian.
Before Schrempp took the stand, Kerkorian's attorneys played excerpts from a videotaped deposition of Hilmar Kopper, the chairman of DaimlerChrysler's supervisory board. The board, which can hire and fire executives, has five American members and five German members.
Kopper said the 2000 replacement of an American, James Holden, as the head of Chrysler with a German, Dieter Zetsche, was an emergency measure. "We were facing such an acute, widening problem that we had to act immediately," Kopper said. "There was no American choice."
Kerkorian, whose Tracinda Corp. was the largest Chrysler shareholder at the time of the merger, claims Daimler-Benz avoided paying him an acquisition fee of up to 62 percent on his shares when the companies merged. Kerkorian did make $2.7-billion in other fees when the companies merged.
DaimlerChrysler maintains Kerkorian supported the deal and grew disgruntled only when his shares lost value.
